Skype ran on the code of Kazaa, the file-sharing service the record labels sued.
Three Estonian programmers wrote Kazaa’s peer-to-peer engine for Niklas Zennström and Janus Friis, who sold Kazaa as the lawsuits came but kept the technology. In 2003 they pointed it at voice calls between computers, routed through other users’ machines for free. They called it Sky peer-to-peer, then Skyper, and dropped the r when Skyper’s domain names were taken.
Skype on Brandseum